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Investment Securities (Tables)

3 Months Ended

Mar. 31, 2024

Investments, Debt and Equity Securities [Abstract]

Summary of Amortized Cost and Approximate Fair Value of Investment Securities and Held-to-Maturity Securities

The amortized cost, approximate fair value and allowance for credit losses of investment securities at fair value as of March 31, 2024 and December 31, 2023 are summarized as follows:

			March 31, 2024 (1)
(amounts in thousands)			Amortized Cost						Allowance for Credit Losses						Gross Unrealized Gains						Gross Unrealized Losses						Fair Value
Available for sale debt securities:
Asset-backed securities			$	62,274					$	(450)					$	—					$	(3,590)					$	58,234
Agency-guaranteed residential mortgage-backed securities			86,227						—						299						(114)						86,412
Agency-guaranteed residential collateralized mortgage obligations			138,573						—						—						(13,615)						124,958
Agency-guaranteed commercial collateralized mortgage obligations			34,573						—						73						(872)						33,774
Collateralized loan obligations			593,236						—						55						(8,796)						584,495
Commercial mortgage-backed securities			114,445						—						—						(1,819)						112,626
Corporate notes			668,459						(4,619)						—						(53,370)						610,470
Private label collateralized mortgage obligations			1,017,587						—						628						(58,045)						960,170
Available for sale debt securities			$	2,715,374					$	(5,069)					$	1,055					$	(140,221)					2,571,139
Equity securities (2)																											33,729
Total investment securities, at fair value																											$	2,604,868

			December 31, 2023 (1)
(amounts in thousands)			Amortized Cost						Allowance for Credit Losses						Gross Unrealized Gains						Gross Unrealized Losses						Fair Value
Available for sale debt securities:
Asset-backed securities			$	97,359					$	(483)					$	15					$	(4,262)					$	92,629
Agency-guaranteed residential collateralized mortgage obligations			129,589						—						—						(12,681)						116,908
Collateralized loan obligations			500,109						—						1						(11,018)						489,092
Commercial mortgage-backed securities			125,885						—						—						(4,249)						121,636
Corporate notes			636,880						(3,469)						79						(50,456)						583,034
Private label collateralized mortgage obligations			1,034,841						—						1,201						(62,481)						973,561
Available for sale debt securities			$	2,524,663					$	(3,952)					$	1,296					$	(145,147)					2,376,860
Equity securities (2)																											28,780
Total investment securities, at fair value																											$	2,405,640

(1)Accrued interest on AFS debt securities totaled $19.5 million and $14.7 million at March 31, 2024 and December 31, 2023, respectively, and is included in accrued interest receivable on the consolidated balance sheet.

(2)Includes perpetual preferred stock issued by domestic banks and domestic bank holding companies and equity securities issued by fintech companies, without a readily determinable fair value, and CRA-qualified mutual fund shares at March 31, 2024 and December 31, 2023. No impairments or measurement adjustments have been recorded on the equity securities without a readily determinable fair value since acquisition.

The amortized cost, approximate fair value and allowance for credit losses of investment securities held to maturity as of March 31, 2024 and December 31, 2023 are summarized as follows:

			March 31, 2024 (1)
(amounts in thousands)			Amortized Cost						Allowance for Credit Losses						Net Carrying Value						Gross Unrealized Gains						Gross Unrealized Losses						Fair Value
Held to maturity debt securities:
Asset-backed securities			$	509,690					$	—					$	509,690					$	345					$	(2,432)					$	507,603
Agency-guaranteed residential mortgage-backed securities			7,001						—						7,001						—						(1,087)						5,914
Agency-guaranteed commercial mortgage-backed securities			1,830						—						1,830						—						(151)						1,679
Agency-guaranteed residential collateralized mortgage obligations			182,856						—						182,856						—						(20,723)						162,133
Agency-guaranteed commercial collateralized mortgage obligations			146,001						—						146,001						—						(21,535)						124,466
Private label collateralized mortgage obligations			184,659						—						184,659						—						(13,826)						170,833
Total held to maturity debt securities			$	1,032,037					$	—					$	1,032,037					$	345					$	(59,754)					$	972,628

			December 31, 2023 (1)
(amounts in thousands)			Amortized Cost						Allowance for Credit Losses						Net Carrying Value						Gross Unrealized Gains						Gross Unrealized Losses						Fair Value
Held to maturity debt securities:
Asset-backed securities			$	575,990					$	—					$	575,990					$	202					$	(2,064)					$	574,128
Agency-guaranteed residential mortgage-backed securities			7,039						—						7,039						—						(649)						6,390
Agency-guaranteed commercial mortgage-backed securities			1,850						—						1,850						—						(134)						1,716
Agency-guaranteed residential collateralized mortgage obligations			186,636						—						186,636						—						(19,049)						167,587
Agency-guaranteed commercial collateralized mortgage obligations			146,765						—						146,765						—						(23,178)						123,587
Private label collateralized mortgage obligations			184,890						—						184,890						—						(11,859)						173,031
Total held to maturity debt securities			$	1,103,170					$	—					$	1,103,170					$	202					$	(56,933)					$	1,046,439

(1)Accrued interest on HTM debt securities totaled $2.6 million and $2.7 million at March 31, 2024 and December 31, 2023, respectively, and is included in accrued interest receivable on the consolidated balance sheet.

Gain (Loss) on Securities

The following table presents gross realized gains and realized losses from the sale of AFS debt securities for the three months ended March 31, 2024 and 2023:

			Three Months Ended March 31,
(amounts in thousands)			2024						2023
Gross realized gains			$	—					$	—
Gross realized losses			(30)						—
Net realized gains (losses) on sale of available for sale debt securities			$	(30)					$	—

Summary of Available-for-Sale and Held-to-Maturity Debt Securities by Stated Maturity

The following table presents AFS debt securities by stated maturity. Debt securities backed by mortgages and other assets have expected maturities that differ from contractual maturities because borrowers have the right to call or prepay and, therefore, these debt securities are classified separately with no specific maturity date:

			March 31, 2024
(amounts in thousands)			Amortized Cost						Fair Value
Due in one year or less			$	31,500					$	26,852
Due after one year through five years			569,353						525,291
Due after five years through ten years			67,606						58,327
Asset-backed securities			62,274						58,234
Agency-guaranteed residential mortgage-backed securities			86,227						86,412
Agency-guaranteed residential collateralized mortgage obligations			138,573						124,958
Agency-guaranteed commercial collateralized mortgage obligations			34,573						33,774
Collateralized loan obligations			593,236						584,495
Commercial mortgage-backed securities			114,445						112,626
Private label collateralized mortgage obligations			1,017,587						960,170
Total available for sale debt securities			$	2,715,374					$	2,571,139

The following table presents HTM debt securities by stated maturity, including debt securities backed by mortgages and other assets with expected maturities that differ from contractual maturities because borrowers have the right to call or prepay and, therefore, are classified separately with no specific maturity date:

			March 31, 2024
(amounts in thousands)			Amortized Cost						Fair Value
Asset-backed securities			$	509,690					$	507,603
Agency-guaranteed residential mortgage-backed securities			7,001						5,914
Agency-guaranteed commercial mortgage-backed securities			1,830						1,679
Agency-guaranteed residential collateralized mortgage obligations			182,856						162,133
Agency-guaranteed commercial collateralized mortgage obligations			146,001						124,466
Private label collateralized mortgage obligations			184,659						170,833
Total held to maturity debt securities			$	1,032,037					$	972,628

Debt Securities, Available-for-Sale, Unrealized Loss Position, Fair Value

Gross unrealized losses and fair value of Customers’ AFS debt securities for which an allowance for credit losses has not been recorded, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at March 31, 2024 and December 31, 2023 were as follows:

			March 31, 2024
			Less Than 12 Months												12 Months or More												Total
(amounts in thousands)			Fair Value						Unrealized Losses						Fair Value						Unrealized Losses						Fair Value						Unrealized Losses
Available for sale debt securities:
Asset-backed securities			$	—					$	—					$	52,676					$	(3,261)					$	52,676					$	(3,261)
Agency-guaranteed residential mortgage-backed securities			47,014						(114)						—						—						47,014						(114)
Agency-guaranteed residential collateralized mortgage obligations			12,283						(105)						112,675						(13,510)						124,958						(13,615)
Agency-guaranteed commercial collateralized mortgage obligations			26,582						(872)						—						—						26,582						(872)
Collateralized loan obligations			114,173						(779)						429,799						(8,017)						543,972						(8,796)
Commercial mortgage-backed securities			—						—						112,626						(1,819)						112,626						(1,819)
Corporate notes			30,829						(532)						410,323						(36,201)						441,152						(36,733)
Private label collateralized mortgage obligations			260,549						(8,133)						572,448						(49,912)						832,997						(58,045)
Total			$	491,430					$	(10,535)					$	1,690,547					$	(112,720)					$	2,181,977					$	(123,255)

			December 31, 2023
			Less Than 12 Months												12 Months or More												Total
(amounts in thousands)			Fair Value						Unrealized Losses						Fair Value						Unrealized Losses						Fair Value						Unrealized Losses
Available for sale debt securities:
Asset-backed securities			$	—					$	—					$	64,029					$	(4,027)					$	64,029					$	(4,027)
Agency-guaranteed residential collateralized mortgage obligations			—						—						116,908						(12,681)						116,908						(12,681)
Collateralized loan obligations			29,241						(392)						438,551						(10,626)						467,792						(11,018)
Commercial mortgage-backed securities			—						—						121,636						(4,249)						121,636						(4,249)
Corporate notes			23,243						(1,147)						424,768						(33,764)						448,011						(34,911)
Private label collateralized mortgage obligations			303,750						(11,243)						613,007						(51,417)						916,757						(62,660)
Total			$	356,234					$	(12,782)					$	1,778,899					$	(116,764)					$	2,135,133					$	(129,546)

Debt Securities, Available-for-Sale, Allowance for Credit Loss

The following table presents the activity in the allowance for credit losses on AFS debt securities, by major security type, for the periods presented:

			Three Months Ended March 31,
			2024																		2023
(amounts in thousands)			Asset-backed securities						Corporate notes						Total						Asset-backed securities						Corporate notes						Total
Balance at January 1			$	483					$	3,469					$	3,952					$	578					$	—					$	578
Credit losses on securities for which credit losses were not previously recorded			—						502						502						—						1,383						1,383
Credit losses on previously impaired securities			—						648						648						273						—						273
Decrease in allowance for credit losses on previously impaired securities			(33)						—						(33)						(61)						—						(61)
Balance at March 31			$	450					$	4,619					$	5,069					$	790					$	1,383					$	2,173

Debt Securities, Held-to-Maturity, Credit Quality Indicator

The following table presents the amortized cost of HTM debt securities based on their lowest credit rating available:

			March 31, 2024
(amounts in thousands)			AAA						AA																																																Not Rated						Total
Held to maturity debt securities:
Asset-backed securities			$	—					$	—																																															$	509,690					$	509,690
Agency-guaranteed residential mortgage-backed securities			—						—																																																7,001						7,001
Agency-guaranteed commercial mortgage-backed securities			—						—																																																1,830						1,830
Agency-guaranteed residential collateralized mortgage obligations			—						—																																																182,856						182,856
Agency-guaranteed commercial collateralized mortgage obligations			—						—																																																146,001						146,001
Private label collateralized mortgage obligations			66,371						44,429																																																73,859						184,659
Total held to maturity debt securities			$	66,371					$	44,429																																															$	921,237					$	1,032,037

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